Puffer Finance received $18M in funding as the liquidity market heated up

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Puffer Finance, an Ethereum-based liquid stake protocol built on the EigenLayer Restaking protocol, has raised $18 million in a Series A funding round led by Brevan Howard Digital and Electric Capital. The funding will be used to launch the project's core network, which marks a major milestone in the development of Puffer Financial's liquid staking solution.

The funding saw participation from prominent investors such as Coinbase Ventures, Kraken Ventures, Lemniscap, Franklin Templeton, Fidelity, Mechanism, Lightspeed Faction, Consensys, Animoca and GSR, among others. In addition to the Series A round, Puffer Finance also received a strategic investment from Binance Labs, further enhancing its position in the liquidity recovery ecosystem.

“Following this round, Puffer has received a strategic investment from Binance Labs, enhancing its position in the liquidity rebalancing ecosystem,” Puffer Finance said in the announcement.

The protocol hinted at future “technological developments” after the mainnet launch, although the specifics of these updates were not discussed.

Puffer's financial technology enables Ethereum validators to reduce their capital requirements from the standard 32 ETH to just 1 ETH, significantly lowering the barrier to entry for individual stakeholders. In addition, users who share Ether through Puffer Finance receive Puffer liquid restaking tokens (nLRTs), which are Ethereum rewards used to develop products in other decentralized finance (DeFi) protocols.

Liquid staking, a process that allows users to share their assets through ERC-20 tokens that allow them to hold their assets, has gained popularity among Ethereum owners following the network's transition to proof-of-stake (PoS). Puffer Finance aims to make liquidity more accessible and efficient for Ethereum users.

According to data from Defilama, Puffer Financial's total value locked (TVL) exceeded $1.2 billion shortly after its initial trial ended in February, indicating demand for the liquidity solution. To date, the protocol has raised a total of $23.5 million in venture capital funding.

Amir Foruzani, Chief Contributor of Puffer Labs, emphasized the goal of the project, “We aim to significantly lower the barriers for home verifiers to participate and provide a more advanced fluid recovery protocol.

Ethereum's liquid stock market has seen significant growth, with a TVL of over $51 billion, largely driven by Lido Finance, the largest liquid storage protocol on Ethereum. In the year As of March 2024, Lido Finance has a TVL of over $11 billion and has over 9.78 million ETH stakes on the platform.

Liquid Stake offers a number of benefits to Ethereum users, including multiplying revenues, reducing risk, improved capital efficiency, improved network security, and the ability to use decentralized and decentralized assets in DeFi applications. By enabling more participants to pay their ETH, projects like Puffer Finance contribute to the overall health and strength of the Ethereum network.

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